Europe is united on how to beat slump, claims PM

Greetings: but Gordon Brown and Angela Merkel fail to agree at Brussels summit

GORDON BROWN claimed today Europe was "united" on moves to tackle the global recession despite a fresh row with France over protectionism.

The Prime Minister said that the two-day Brussels summit had "laid the foundations" for the London G20 meeting next month, with plans for international co-operation on regulation and public spending.

But his claims were overshadowed when it emerged that France's state-owned carmaker Renault was shifting production from Slovenia back home to Paris.

As Mr Brown declared "we are an anti-protectionist European Union", French ministers started a row by linking the move to the country's economic rescue package unveiled by president Nicolas Sarkozy. The European Commission was furious at the French decision, claiming it was "illegal" and undermined the EU's backing for free trade and its single market.

In a further blow to Mr Brown, Germany and France both rejected the idea of a new fiscal stimulus of massive public spending at the G20 summit.

Mr Brown appeared to signal that no specific figures will be included in the April summit package, referring only to a pledge to "do whatever is necessary" to boost economies with extra spending.

He dismissed claims that the EU was divided, focusing on the stimulus of £400 billion already announced, as well as a new plan to lend the International Monetary Fund $100 million and set up a £50 billion emergency fund to help protect vulnerable Eastern European nations.

Mr Brown shrugged off claims that Britain and America's hopes of a new stimulus were being rebuffed. "What you will find in the [EU summit] communiqué is a determination to do whatever is necessary to restore jobs and growth," he said.

"I think you will find that's the spirit of every country, that's the spirit of the European Union. I think you will find when the G20 gets together that's what informs its conclusions. Necessary action will be taken to deal with the problems of unemployment and growth and we are united in wanting to see that happen." Despite the disagreements, the EU agreed to:

●Blacklist tax havens and set out sanctions against countries that don't co-operate with financial and tax rules.

●Supervise all financial players who could destabilise the economy - including hedge funds, private equity and others.

●Regulate and oversee credit rating agencies.

●Set out standards for corporate pay and bonuses that prevent reckless risk taking.

●Set up groups of national regulators to monitor major banks and financial groups by the end ofthis year.

●Increase capital requirements so banks set more money aside against tough times.

Emergency cash is only for member states outside the 16-nation eurozone. Hungary and Latvia have already received ¤10billion (£9billion) to deal with their balance of payments crises.

German chancellor Angela Merkel last night made it plain she opposed a major new stimulus. "Trying to outdo one another with promises will certainly not bring any calm to the situation," she said.

Further tensions between Britain and the EU emerged over plans for a new pan-European framework for financial regulation. Chancellor Alistair Darling wants it run by independent experts rather than officials from each nation state.